ARTICLE
22 February 2024

State AG Updates: February 1-7, 2024

CM
Crowell & Moring LLP
Contributor
Our founders aspired to create a different kind of law firm when they launched Crowell & Moring in 1979. From those bold beginnings, our mission has been to provide our clients with the best services of any law firm in the world through a spirit of trust, respect, cooperation, collaboration, and a commitment to giving back to the communities around us.
Each week, Crowell & Moring's State Attorneys General team highlights significant actions that State AGs have taken. Here are this week's updates.
United States Strategy
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Each week, Crowell & Moring's State Attorneys General team highlights significant actions that State AGs have taken. Here are this week's updates.

Multistate

  • A multistate coalition of 13 attorneys general sent a letter to Department of Treasury Secretary Yellen opposing the allegedly unconstitutional actions of the Department of Treasury to initiate a Direct File program for U.S. taxpayers and demanding President Biden's administration to stop attempts to provide the Internal Revenue Service (IRS) authority not granted by Congress. The letter opposes the IRS's Direct File pilot program because the agency lacks authority to create such a program and alleges that the program will have negative consequences for low income filers and small businesses. Congress commissioned a study to investigate the feasibility of a direct file program, but the coalition of attorneys general found the study to be flawed.
  • A bipartisan multistate coalition of all states, territories, and districts, led by Colorado Attorney General Weiser, announced a national settlement with global marketing and public relations firm Publicis Health for $350 million for its role in the opioid epidemic. Publicis Health was a marketing firm for Purdue Pharma for more than a decade and assisted with targeted advertising to healthcare professionals including advertising of opioids. Publicis Health created advertising materials for Purdue Pharma to use with healthcare professionals that allegedly influenced those professionals to increasingly prescribe opioids. As part of the multistate resolution, Publicis Health recognized the harm it caused, will disclose thousands of internal documents on a public website, and will no longer conduct any marketing for opioid-related products.
  • Tennessee Attorney General Skrmetti and Virginia Attorney General Miyares filed a lawsuit against the National Collegiate Athletic Association (NCAA) for federal antitrust violations based on anticompetitive restrictions and practices. The lawsuit alleges the NCAA employs anticompetitive restrictions on current and future student-athletes' ability to benefit from or meaningfully negotiate their name, image, and likeness (NIL) during the recruiting and enrollment process, which would allegedly violate the Sherman Act. The lawsuit highlights the Supreme Court's ruling that the NCAA violated antitrust laws by imposing unreasonable restraints on the compensation of student-athletes and alleges the NCAA has now adopted a vague series of guidelines limiting student-athletes' ability to receive fair compensation.
  • A multistate coalition of 22 attorneys general sent a letter to President Biden and the secretary of the U.S. Department of Energy to end the administration's pause on exports of liquefied natural gas. On January 26, 2024, President Biden announced a pause on new approvals of liquefied natural gas exports. The coalition characterizes the Biden Administration as attacking the U.S.'s energy industry and highlighted that the U.S. is a world leader in natural gas production, which supports more than four million jobs.
  • A bipartisan multistate coalition of 51 attorneys general issued a warning letter regarding illegal election-based robocalls using artificial intelligence after New Hampshire Attorney General Formella announced that the Attorney General's Election Law Unit identified the source of January 21, 2024 robocalls received by many New Hampshire residents, which appeared to have an AI-generated voice of President Biden encouraging New Hampshire residents to not vote on January 23, 2024. The source of the robocalls was Texas-based Life Corporation and Walter Monk. The Anti-Robocall Multistate Litigation Task Force, a bipartisan task force, and the Federal Communications Commission Enforcement Bureau assisted with the investigation.
  • Multiple states' Offices of Attorney General released alerts or notices regarding identity theft awareness in the first week of February for Identity Theft Awareness Week. For example, Michigan Attorney General Nessel highlighted a recent study by U.S. News and World Report that noted nearly three-fourths of respondents had experienced at least one case of identity theft. The notices provided consumers with recommendations to stay aware of identity theft attempts.

California

  • California Attorney General Bonta filed a lawsuit against Southern California-based construction subcontractor West Coast Drywall & Company, Inc., d/b/a West Coast Drywall & Paint, for alleged ongoing wage and hour violations. The lawsuit alleges that the company's piece-rate compensation system failed to pay employees wages owed, overtime wages, provide accurate wage statements, reimburse work-related purchases, or provided required breaks. West Coast Drywall & Paint advertises as Southern California's largest drywall and painting subcontractor.
  • California Attorney General Bonta announced conditional approval of the sale of Twilight Haven to Bayshire Central Valley, LLC. In June 2023, Twilight Haven filed for bankruptcy after closing its skilled nursing facility, which caused a disruption of services and dislocation of residents. The sale will allow the skilled nursing facility to reopen and provide healthcare services. Under California law, any transaction involving the sale or transfer of control of a health facility owned by a nonprofit must receive Attorney General approval.
  • California Attorney General Bonta issued a consumer alert following California Governor Newsom's declaration of a state of emergency for several counties in Southern California due to a series of winter storms with damaging winds and heavy snowfall. Attorney General Bonta reminded Californians that price gouging during a state of emergency is illegal under Penal Code Section 396.

Indiana

  • Indiana Attorney General Rokita's Homeowner Protection Team announced a settlement with Willow Brook Gardens Apartments, Wellington Apartments, and Briergate Apartments in Indianapolis based on alleged poor treatment of tenants. The apartment building owners agreed to a payment of $70,000 in rent credits to current tenants, a payment of $20,000 in additional restitution for other complainants, the dismissal and expungement of over 150 prior eviction proceedings, and a two-year compliance monitoring period. Further litigation is pending against additional apartment defendants.

Michigan

  • Michigan Attorney General Nessel announced that the Michigan Supreme Court ordered oral arguments be scheduled in Attorney General Nessel's appeal of an order preventing the Michigan Office of the Attorney General from investigation of Eli Lilly's insulin pricing practices. Two prior decisions by the Michigan Supreme Court, Smith v. Globe Life Ins. Co. and Liss v. Lewiston-Richards, Inc., were used by Eli Lilly to assert that the Michigan Consumer Protection Act is inapplicable to the sale of insulin. The Michigan Supreme Court agreed to hear arguments for reversing the prior decisions, which Attorney General Nessel asserts are not supported by a plain reading of Michigan's Consumer Protection Act. The decisions preclude state investigation of suspected illegal business practices when the target business sells products or services authorized for sale by a law administered by a state or federal agency, irrespective of the underlying allegations of the business practices. This broad interpretation has been used as a shield by corporations from Michigan state scrutiny.

Minnesota

  • Minnesota Attorney General Ellison released a report detailing the effects of social media, artificial intelligence, and other emerging technologies on young people commissioned by the Minnesota Legislature in 2023. Beyond evaluating the impact of technology companies, the report provides multiple recommendations for policymakers to create safer and healthier online environments for young people and discusses consumer protection laws, proposed and enacted, from other jurisdictions.

North Carolina

  • North Carolina Attorney General Stein announced a settlement with First National Bank of Pennsylvania based on allegations that the bank engaged in racially discriminatory redlining when providing home mortgage loans in the Charlotte and Winston-Salem areas. This settlement was agreed upon in coordination with the U.S. Department of Justice's Civil Rights Division and the U.S. Attorney's Office for the Middle District of North Carolina. First National Bank entered North Carolina in 2017 and operates 31 bank branches in North Carolina. First National Bank allegedly avoided providing mortgage loans in areas that had majority Black and/or Hispanic residents. Per the settlement, First National Bank will create a $11.75 million loan subsidy fund to increase credit for home mortgage loans for communities of color in North Carolina.

Vermont

  • Vermont Attorney General Clark filed a lawsuit against Codling Brothers Logging and owners, David, Joe, and Paul Codling, for violations of the Vermont Consumer Protection Act. Codling Brothers Logging allegedly engaged in unfair and deceptive business practices with five Vermont landowners by making misleading statements about their services and subsequently taking more logs than agreed and failing to fairly compensate landowners.

Washington

  • Washington Attorney General Ferguson announced a settlement with Providence, one of the largest health care systems, which requires Providence to forgive more than $137 million in medical debt and to refund more than $20 million to patients for overages. Washington state law requires hospitals to provide medical financial assistance, known as charity care, to Washingtonians based on their income level to both insured and uninsured patients. Attorney General Ferguson filed an enforcement action against Providence for deceptive practices with patients regarding medical billing and failure to provide adequate notice of charity care and financial assistance options. The enforcement action alleged that between 2018 and 2023 Providence regularly disregarded its charity care legal obligations under state law.
  • Washington Attorney General Ferguson announced a settlement with Federal Way Discount Guns and its owner, Mohammed Baghai, which requires payment of $3 million for violating Washington's prohibition on selling high-capacity magazines of over ten rounds of ammunition. A Judge in King County Superior Court ruled that Federal Way Discount Guns violated Washington's Consumer Protection Act in April 2023 by selling high-capacity magazines. Attorney General Ferguson's investigation found that Federal Way Discount Guns sold over 3,625 high capacity magazines between July 1, 2022 (the date the law went into effect) and when the complaint was filed half a year later. The settlement resolves the remainder of the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
22 February 2024

State AG Updates: February 1-7, 2024

United States Strategy
Contributor
Our founders aspired to create a different kind of law firm when they launched Crowell & Moring in 1979. From those bold beginnings, our mission has been to provide our clients with the best services of any law firm in the world through a spirit of trust, respect, cooperation, collaboration, and a commitment to giving back to the communities around us.
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